February 18th, 2015 / Insight posted in

Employer beware….Get your non-competition clauses right!

By Linda Powell The Court of Appeal recently overturned a decision where additional words were inserted into a non-compete clause by the High Court judge to make the clause workable for the employer. The Judge had taken an unorthodox approach to interpretation of the clause. This case caught employment lawyers and HR professionals by surprise to discover that the judge was comfortable “blue-pencilling” words in to make the clause work for the employer. The Court of Appeal disagreed with the High Court’s approach finding that the judge had simply gone too far in this case.  The Court of Appeal emphasised the traditional view that it takes towards interpretation of these clauses, and made it clear that employers need to think very carefully about the drafting of their non-competition clauses. The courts’ starting position is that these clauses are anti-competitive contrary to public policy, and will only make in-roads into these principles if the clause is carefully drafted. They will not correct mistakes or re-make a bad bargain, so employers need to be beware.  If you have concerns about the enforceability of your non-competition clauses, then talk to the Legal Team at HR Insight Ltd for some advice. (Prophet plc v Huggett [2014] EWCA Civ 1013.)